Mortgage Rates
Are you shopping for the best possible mortgage rates? The only sure thing about interest rates is that they are going to change. It’s unfortunate that nobody really knows whether the rates will be going up or down in the near future other than speculation. Your best offense to getting low mortgage rates is to do everything possible to keep your credit scores high, understand all the different options available to you, and make sure you compare different lenders.
As a general rule of thumb, we do know that when the economy is weak and there are no drastic inflation variations, mortgage rates will usually be low. When the economy is in a recovery mode or getting stronger, the rates will tend to increase. Other than these two basic fundamental principals that have withheld the test of time, the interest rates will move up or down without much explanation.
When mortgage rates are low it’s a good time to lock in your rates for the long term. When mortgage rates are high, you may want to consider some of the alternative loan with initial lower rates for a specific term, and then adjust to higher rates in the future. Then hopefully with rate cycle back low again, you will want to re-finance into the lower rates and lock in for the long haul. The main thing you can control is paying your bills on time and keeping your credit score high, so you will be able to get the lowest mortgage rates available to you in any given market. Remember that everything in life is usually negotiable, especially mortgage rates. Anybody who tells you otherwise may not be telling you the whole truth, so the only way to check out somebody’s sincerity is to shop around.
When you find a good bank willing to give you the lowest rates, you then need to compare the different products available with that lender. For example the differences in a 30 fixed versus a 15 year fixed, putting 5% down versus 20% down, or buying down your rate or not. Comparing the appropriate options for your individual circumstances will enable you to choose the best financial option. One of the most important questions to ask yourself when comparing mortgage rates is how you will most likely keep the property.
Some of the other important factors to compare are the discount points (bank fee to originate the loan), pre-payment penalties, and title and escrow charges. Each of these categories is an entirely different area where lenders can tuck away extra fees. When comparing mortgage rates, ask your lender what the total cost to close, your APR, and when is your rate going to be locked in. Unscrupulous lenders will quote you anything you want to here to get your foot in the door, then bait and switch your rate on the closing day after you are too far invested in the process to go back to another lender.
It is recommended to shop at least 4 lenders before moving forward with on particular lender. Although it nearly impossible to predict interests, you can follow general trends and try to lock in during to get the best mortgage rates. If you want the best mortgage rates available to you, make sure you do your research.
With the use of the Internet, many companies make is it fast and easy to compare rates.